Author: Lanhu Notes
LayerZero recently announced the launch of the heterogeneous L1 chain Zero, in collaboration with Wall Street giants (Citadel Securities, DTCC, ICE, etc.). The Zero chain aims to achieve 2 million TPS and reduce transaction fees to 1/10,000 of a cent. If it truly meets these goals, it would surpass all current L1s.
Is the Zero chain good or bad for Ethereum? Is it a new "Ethereum killer"?
First, the conclusion: Zero is not an Ethereum killer but an amplifier for its ecosystem. It addresses scalability pain points without rejecting ETH's security anchoring. In the long run, it will actually promote Ethereum's evolution from a "single machine" to a "multi-core hub."
This can be explored from three aspects:
First, from a technical perspective, Zero's core technologies include: QMDB (quantum storage/100X write speed), FAFO (scheduling algorithm/parallel execution), and "infinite partitioned execution" (Zones are independent, 2 million TPS), among others. It is also EVM-compatible, allowing developers to migrate high-load DApps without rewriting Solidity code.
However, a closer look at Zero's whitepaper reveals that it is not an "independent kingdom." It adopts a "compute-prove-verify" paradigm: execution is completed on Zero's heterogeneous multi-cores, but ZK proofs (Jolt Pro zkVM, gigahertz-level speed) can be bridged to Ethereum L1/L2 settlement layers, leveraging Ethereum network's 1 million+ validators for decentralized security. This is similar to L2's Rollup model but more flexible: it does not require mandatory calldata submission but offers optional "hot-swappable" bridging (LayerZero OFT standard, latency <100ms). When DApps migrate to Zero, they typically transfer 30-50% of high-load execution components (such as NFT minting), while core governance and state synchronization can be anchored to ETH via OFT bridging, supporting optional hybrid deployment.
Why is it not a killer? If Zero truly aimed to disrupt, it wouldn't need EVM compatibility (for example, Solana uses Rust and stands alone). Instead, its design directly addresses L2 pain points—read amplification and centralized sequencers. A recent tweet by Vitalik Buterin also mentioned that this kind of "external interoperability" can strengthen ETH's role as a "trust anchor" (though this wasn't specifically about Zero, it has a similar effect). Technically, Zero can act as Ethereum's "external execution brain" rather than a replacement.
Therefore, technically, Zero and Ethereum are heterogeneously complementary, not a zero-sum disruption.
Second, from the perspective of ETH value capture, this is a key concern for many ETH holders.
Zero's DApp migration may cause short-term ETH value outflow, such as a 5-10% reduction in gas fees or a 2-3% diversion of TVL (based on L2 historical simulations). However, its economic model attracts traffic through low fees and can route a portion of cross-chain value back to ETH via OFT bridging, indirectly benefiting Ethereum's security anchoring and burn mechanism—especially in RWA DvP settlements, where the routing rate may be higher.
Zero's gas fee design is extremely user-friendly (<$0.0001/Tx), optimized for high-frequency RWA settlements (such as DTCC's trillion-dollar clearings). However, the LayerZero protocol's OFT standard requires cross-chain message/asset transfers to be verified via ETH, generating 0.2-0.5% in bridging fees.
RWA is a key lever: Zero's collaboration with Citadel/ICE targets TradFi asset tokenization, but DvP (delivery vs. payment) settlements can rely on Ethereum's security (accounting for 60%+ of RWA TVL). BlackRock's BUIDL fund is already on Ethereum; Zero only expands its execution end, with full routing回流 for single transactions worth tens of thousands of dollars.
Assuming a scenario where Zero achieves 1 million TPS (baseline assumption), annual bridging revenue could reach $3 billion, with a significant portion of this value captured by ETH (estimated at over 2x L2 calldata). As a "monetary cornerstone," ETH benefits from Metcalfe's Law: multi-chain user growth adds value.
Counterintuitively, compared to L2, Zero might be more beneficial for Ethereum's ETH value capture.
In summary, economically, Zero is not a "predator" but more likely a "traffic pump"—after DApps migrate in, ETH gains more compound benefits rather than suffering losses.
Third, from an ecosystem perspective, the ecosystem is the lifeblood of blockchain. Ethereum's developer community accounts for about 70% (GitHub activity), and L2 ecosystems host 80% of DApps. If Zero were a "killer," it would need to rebuild an ecosystem from scratch. But in reality, its interoperability DNA turns Ethereum from an "island" into a "hub."
LayerZero has already connected 150+ chains (including Solana/BNB). After Zero launches, many DApps will opt for "hybrid deployment" (execution on Zero + governance on ETH). Most developers will see Zero as a "cure"—addressing L2 internal competition and promoting Ethereum's transition to Stage 2 decentralization.
By 2026, as crypto space enters the "RWA era," Zero's TradFi gateway will attract non-crypto users, which is beneficial for expanding the Ethereum ecosystem and will push Ethereum toward its role as a crypto hub.
In summary, Zero and ETH can collaborate in the RWA space. They are not in an L1-L2 relationship, but from value and ecosystem perspectives, their synergy could even be better than with L2. Zero's debut is not a crisis for Ethereum but an opportunity.
